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Bernanke may pump up the dollar

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The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

Taper taper taper. Yen yen yen. The world's financial markets are obsessed with just two things right now: the potential beginning of the end of the Federal Reserve's bond purchases and what Japan's currency is doing.

But that's created a lot of confusion for investors. Consider this. There's a lot of talk that the dollar is weakening against the yen (as well as the euro) because of concerns about the Fed cutting back, or "tapering" its quantitative easing program.

If you stop and think about it, that doesn't make a heck of a lot of sense. Fed chairman Ben Bernanke has been demonized by inflation hawks because of QE. Fed critics think that Bernanke has been willfully destroying the dollar by buying more and more bonds and mortgage-backed-securities. The current monthly tally for QE is now $85 billion of purchases every month.

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